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Full text of "The Gay Genius"

78                                THE GAY GENIUS

Without being an economist, one is safe to accept the general thesis
that the two factors in a nation's wealth are production and distribu-
tion. To increase a nation's wealth, one must increase its productivity
or have a better distribution of goods. In Wang Anshih's day, how-
ever, increase of production was out of the question, since there was
no means of industrialisation. Therefore, all that a financial wizard
could do would be in the line of distribution. Since Wang was
primarily interested in enriching the national treasury, increase of the
nation's wealth strictly meant the increase of the government's revenue.
Wang saw clearly that the rich merchants and landlords were making
money in a system of free enterprise, and he could not see why the
government should not take away the profits from free enterprise and
run business and make the money itself. The conclusion was inevit-
able. The terms he used were actually strikingly modern. He wanted
to stop "monopoly" (chienping) by capital; he wanted to equalisi^j
wealth by "taking it away from the rich and giving it to the poor";'
he wanted to prevent the peasants from borrowing from landlords at
high interest. It would be a great and charitable measure on the part
of the government to lend money to the peasants during spring plant-
ing and have them return the money when the crops were harvested.
Wang Anshih was able to convince the Emperor that all these measures
were "for the good of the "people"; but history records that, after a
period of hesitancy, the thing that decided him on launching the loans
was the argument of a certain minor official that with an investment
of half a million dollars the government stood to earn a quarter of
a million dollars in interest per year, since there were two crops ana
the twenty or thirty per cent interest could be collected twice a year.

Without going too much into the details of the various reforms,
which were started in 1069 and ended disastrously about eight years
later when both Wang Anshih himself and the Emperor were
thoroughly sick of them and of each other, we may give a brief sum-
mary of these measures.

The most important and the best known were nine in number,
which I have for the sake of convenience arranged in three groups.
There were three state capitalist enterprises, three new taxes, and tfcree
systems of registration for a complete regimentation and control ofe
the people. The three'state capitalist enterprises were: a government
bureau for national trade, a bureau for government stores in retail
trade, and the famous loans to the farmers with an official interest of
tw,enty per cent and an actual interest of thirty per cent (i.e., plus
application and registration charges). The three new taxes were the
draft exemption tax, the excise tax, and the income tax. The systems
of registration were the organising of all citizens into groups of ten
families for military draft (the p&ochia), and the re-registration of